Management recognises the need to tap cross-sector synergies. To this end, the Group is constantly exploring and evaluating cost management methods, to better exploit the scale of its businesses internationally. The Group in 2005 continued to actively coordinate and cooperate in projects across the board when calling for the tender of contracts, negotiation of bulk purchases, and sharing of vendor information.
Key initiatives undertaken in 2005 resulted in an estimated S$10 million in savings for the Group. This was achieved mainly by leveraging on economies of scale and exploiting Group-wide synergies. Continuous improvements were primarily made in the areas of energy saving, insurance, advertising and promotions, travel and procurements. Energy savings amounted to about S$6.5 million in 2005, following the renegotiation for a Group contract rate via a strategic partnership with local energy companies. The implementation of a CapitaLand insurance claim with Group-wide coverage enabled the consolidation of insurance policy and risk management information, allowing the Group to manage risk more efficiently at an operational level. Through the appointment of the agency-of-record for media buying by the entire CapitaLand Group, substantial advertising and promotion savings were also achieved.
Looking ahead, the Group is currently in the process of implementing an Electronic Resource Procurement system across all SBUs, allowing for more cost efficient resource management. In actively and continuously improving its cost saving strategies, the Group aims to also pass on the benefits to tenants and business partners.